Tourist return ups Harrods' profits

Department store and Knightsbridge landmark Harrods has almost tripled annual profits to£19.9 million.

Profits for the year to January 31, 2004 grew from£7 million the year before, when the store was badly hit by the slump in UK tourism.

The turnaround in the retailer's fortunes has been helped by an increase in demand for luxury goods. Harrods claims to have the largest range of luxury brands of any UK department store.

'The sales of luxury goods has been the most important factor in our improvement,' a Harrods spokesman said.

The retailer has also reduced its net debt from£317 million last year to£295 million. Administration costs have been reduced by 20 per cent, along with smaller cuts in distribution, store and payroll costs.

Tourists - who have long been crucial to its sales - accounted for 25 per cent of sales. The company's improved figures come as a particular bonus to owner and chairman Mohamed Al Fayed. His annual dividend increased to£27 million from£19 million last year, when it had been cut by 35 per cent.

In September, the store's ground-floor menswear departments will be refurbished. It is the first time in 14 years that the department has been updated. Work is expected to last 18 months.

Meanwhile, the company's summer sale will begin on June 28 and be opened by US singer Christina Aguilera.